EURGBP helping the wild price swings
The EURUSD fell in sympathy with the GBPUSD just prior to NY traders entering for the day. The move lower took the price below support at the 1.1334 level. This was the low on Friday and again during yesterday's trade. It also was a retracement level (from March 29 low - last low before trend move higher). Today that level was broken but only for a brief moment. The next hourly bar stalled right at the level and the price has scooted higher to a high of 1.1372.
Does the pair reverse and complete a full retracement higher now?
Wiell, anything is possible and it certainly has been a pattern of late, but I am looking for some overhead selling. Why?
The close yesterday was 1.1383. The closes on Friday and Monday were both at the 1.1386 area. So with the price below those levels I will look for that area to be an area to now lean against. On corrections, look for sellers to lean against 1.1383-86 with stops above (PS. the 100 hour MA is at 1.1381 currently thus adding to the idea that it should be a ceiling).
The hurdle below remains strong at the 1.1334 level. A move below that will run into siupport at the 1.1303-09 area. The 200 hour MA is at 1.13088. The 50% of the same move higher comes in at 1.1303.
What might help a more bearish picture for the EURUSD is if the EURGBP can slow its run higher.
If you look at the daily chart the pair, the price is pushing at topside trend line.
If you look at the weekly chart, the price in the EURGBP is pressing against the 61.8%.
So if the EURGBP can stall at this area, or even correct lower, it may help the EURUSD to stay below support and move lower.
